Affordable Care Act fails to lower rural health care costs

Health care costs have never been considered economical in rural communities, but the divide between rural and urban costs have only been exacerbated by the Affordable Care Act.

"We've gone from letting the insurance companies use a pre-existing medical condition to jack up rates to having a pre-existing zip code being the reason health insurance is unaffordable," Colorado rancher Bill Fales told the Associated Press. "It's just wrong."

Like others living in rural areas, Fales has seen his monthly premiums skyrocket by 50 percent to nearly $1,800 per month.

Insurance officials argue that geography is just one of the three determinants used by insurance companies under the federal health care law to set premiums. Other insurance price zones on the most-expensive list include rural areas in Georgia, Nevada, Wisconsin and Wyoming.

Robert Zirkelbach, a spokesman with America's Health Insurance Plans, a Washington, D.C.-based industry group, explains that the cost differences between densely and sparsely populated areas shouldn’t be considered a shock: it is simply more expensive to deliver health care in rural communities were fewer doctors, specialists and hospitals are stretched thin by the aging rural population and the inherent dangers surrounding farming.

According to USDA data, there were 42,000 work-related injuries reported in 2009. The Centers for Disease Control and Prevention shows that in 2010, 476 farmers and farm workers died as a result of a work-related injury, incurring a fatality rate of 26.1 deaths for 100,000 workers.

And when it comes to saving lives, proximity to health care can mean the difference between living and dying, and in rural areas, that isn’t always possible.

"In rural areas, it's common that you are seeing transport times of over half hour to an hour to a trauma center," Dr. Sage Myers, a pediatrician and researcher at the University of Pennsylvania said, noting that in South Dakota, there are just one or two trauma centers covering the whole state.

Some states do have an option to reduce the premium divide between urban and rural areas. They can set a single statewide rating zone, reducing premiums to rural regions by shifting costs onto more-populated areas in the state. Just six states – Delaware, Hawaii, New Hampshire, New Jersey, Rhode Island and Vermont – chose a single rating zone.

There's always been geographic variance in insurance," said Craig Garthwaite, an economist at Northwestern University's Kellogg School of Management who has studied the economic consequences of the new health care law.

The difference now, he said, is insurers have fewer levers to adjust premium pricing. Garthwaite also said the health care law makes it easier for rural health insurance shoppers to see what city residents are paying.

"That's forcing them to confront the market, which is a new thing," he said.